Based on the experimental results of atomic force microscope observation of the microstructure and the giant magneto-impedance (GMI) effect of Fe73.5Cu1Nb3Si13.5B9 nanocrystalline alloy, we propose a model for exploring the influence of the microstructure on the GMI effect in this kind of Fe-based nanocrystalline soft magntic alloy which explains successfully the GMI behavior at low frequency. The model possesses the main features of the sandwiched model while eliminating its deficiencies. This model is called the mesoscopic model. We also point out the influence of the electrical conductivity σ and the permeability μ of nanocrystal grains on the GMI effect of the Fe-based nanocrystalline alloys.