Microfinance industry has achieved an unprecedented growth over the last two decades. Consequently, the landscape of the microfinance institutions (MFIs) has evolved to include a diverse array of institutional types. As a result of this increasing diversity, several classifications of MFIs based on performance and institutional set-up emerged to address the needs of donors and investors. Today, definitions that classify MFIs into tiers based on several dimensions that include size, maturity and sustainability are increasingly used by practitioners and researchers. The first part of this thesis presents the widely accepted tiered classifications of MFIs. The second part of the thesis analyzes the institutional development of six top-tier MFIs by investigating the changes in ownership, governance and human resources management across tiers. Finally, the thesis explores the commonalities and distinctive patterns in MFIs that advanced tiers over time, by examining the speed of growth, capital structure and performance.