The microfinance industry has experienced rapid expansion worldwide. Yet in spiteof this growth, there is a paucity of a solid theoretical ground to allow one toanalyse the effectiveness of microfinance. To help address this shortcoming, this paper presents a conceptual framework, which is an important part of a PhD research on the efficiency and effectiveness of microfinance in Vietnam. Thisframework allows analysts to overcome the issue fungibility in microfinance evaluation. In addition, it presents clear pathways of effects that microfinance created to target clients and related stakeholders.