Factors influencing the financing choice among creative enterprises in Nairobi County, Kenya: the moderating role of government support

Abstract

In Nairobi County, Kenya, creative businesses' sustainability and expansion depend critically on their financial decisions. The aim of this investigation was to look at the elements affecting financing choices for creative enterprises. Based on the Life Cycle Theory of Financing and the Pecking Order Theory, the research investigated using government support as a moderating factor how growth possibilities, ownership, asset tangibility, and financial literacy affect financing decisions. Targeting 100 creative businesses across ten creative industry sub-sectors, categorised by UNCTAD, the study used a descriptive correlational research design. Structured questionnaires gathered data; PLS-SEM was used for analysis. This investigation is aimed to provide insightful analysis of the financing practices of creative businesses and guide policy and financial institutions on the creation of initiatives catered to this sector. From the results, the study found out that ownership control determines significantly financing choices among the creative enterprises under study. Growth opportunities is an insignificant determinant of financing choice among the creative enterprises under study. Asset tangibility determines significantly financing choice among the creative enterprises under study. Financial literacy determines significantly financing choice among the creative enterprises under study. The investigation concluded that government support does not have a moderating effect on the determinants of financing choice for creative enterprises. The study recommends that entrepreneurs adopt more formalized and diversified ownership structures. Creative businesses under study should align their financing choices with scalable and sustainable business models. The creative businesses under study should strategically utilize their intangible assets such as intellectual property, brand equity, and digital content as part of their financing strategies. The study further recommended that it is essential for the businesses under study to prioritize financial literacy as a foundational element of entrepreneurial success.

Key words: financing choice, growth opportunities, ownership control, tangibility of assets, financial literacy, government support, creative businesses, Nairobi County, Kenya.