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Microfinance institutions (MFIs) provide credit to low-income beneficiaries, enabling them to gain access to financial assistance. To ensure that clients are protected, all MFIs should adhere to basic corporate governance principles to guarantee uniform standards, transparency and good corporate governance practices in their institutions. Hence, the purpose of this paper is to explore the client protection practices and sustainable performance of Amanah Ikhtiar Malaysia (AIM), a leading MFI in Malaysia.

Closed-ended questionnaires were distributed to managers and assistant managers at 76 AIM branches across the peninsular Malaysia. A response rate of 68 per cent was achieved from the total questionnaires distributed.

The result shows that the level of client protection in AIM is high. It shows that accountability and debt collection process have a significant influence on the level of sustainable performance of AIM, whereas transparency and transaction costs have an insignificant impact on the level of sustainability of AIM. Consistent with the agency theory and institutional theory, the result also implies that having better debt collection process policy and structure, and accountability among management will enhance the level of sustainability of AIM.

Previous studies focused on the single issue of sustainability in microfinance, such as on repayment performance among the poorest people whom AIM served as clients. However, studies on the accountability towards clients are still underdeveloped by researchers. Hence, the current study fills the gap by examining whether client protection affects the sustainability of AIM.

This study aims to evaluate the current practices conducted based on in-depth interviews with 16 Amanah Ikhtiar Malaysia (AIM) medium-level managers who were selected randomly, including branch managers and operational officers. All of the interviewees have two characteristics; they face customers directly and influence their decision-making.

Based on the findings of this study, AIM has a high level of customer orientation and inter-function coordination and a middle level in competitor orientation.

This paper initially presents the definition of a unique concept, namely, Islamic market orientation, which is defined based on the incorporation of Islamic concepts and market orientation by discussing the characteristics of Islamic market-oriented organisations. Then, an empirical discussion for evaluating market orientation in a microfinance provider is presented. The paper uses the synthesis of different real positions for developing discussions on whether AIM is following market orientation strategies, and, if so, at which level it is located from each dimension’s point of view.