This IDS Bulletin on ‘Microfinance’ has grown out of a workshop on ‘Recent Research on Microfinance: Implications for Policy’, held at IDS in February, 1998 and organised by the Poverty Research Unit at Sussex (PRUS). The workshop brought together the extraordinary diversity of recently completed and on-going research in the UK, to discuss how research output can inform policy for better outcomes. Participants included people with different perspectives on the issue, from academics to donors and policy makers. While not confined to it, the discussion drew many lessons from the wider experience on microfinance in South Asia, particularly Bangladesh. The workshop covered three broad themes of impact assessment, rural financial sector linkages, and incentive structures. Discussion on these themes was structured around fourteen papers. The proceedings of the workshop have been published. Four papers presented at the workshop have been selected and revised for the Bulletin. The emphasis is primarily on original work that has not been published elsewhere. In addition, there are six invited contributions. It is hoped that the outcome is a comprehensive review of the state of the art, which identifies both practical proposals and a research agenda. The workshop was funded by the Department for International Development (DFID), to whom grateful acknowledgement is made, but to whom no responsibility is attributed.