Surviving the Storm: An Exploratory Analysis of Pandemic's Impact on Urban Single Mother Entrepreneurship

A microfinance scheme has emerged as a crucial tool in reducing poverty gaps in many developing countries. A notable player in the arena is Amanah Ikhtiar Malaysia (AIM), a pioneer in microfinancing in Malaysia since 1987. AIM’s microfinance program injects small-scale businesses, particularly benefiting single mother entrepreneurs, contributing to capacity-building and empowerment. However, the advent of the COVID-19 pandemic, coupled with Movement Control Order (MCO), has adversely affected various business sectors and vulnerable groups, including single mothers engaged in microfinancing enterprises. This study employs primary data to assess the impact of AIM’s microfinancing programs on single-mother entrepreneurs during the crisis. Utilizing a quantitative approach with a two-stage sampling process involving 422 respondents in urban areas, the research evaluates the relationship between empowerment indicators (economic, social, digital, and psychological) and management and governance aspects of program effectiveness. The findings reveal that the microfinancing program’s overall effectiveness, economic, digital and psychological empowerment indicators, and program management are at a moderate level, while social empowerment is high. Economic and digital empowerment, along with effective management, positively and significantly influence program effectiveness, whereas social empowerment has a negative and significant impact. The study concludes with recommendations for enhancing AIM’s microfinance program, equipping single mother entrepreneurs to better navigate future challenges, and informing policy formulation related to their empowerment.