Formal Credit Demand For Farmers Entrepreneurship

Farmers entrepreneurial activity will accelerate to boost rural economic development of modern agriculture in China,therefore,Farmers entrepreneurial activity is the highlights of the current rural economic activity.This paper focus on the formal credit needs of farmers entrepreneurship and to promote the development of farmer entrepreneurs by in-depth excavation,scientific research. Absorb the existing theoretical resources and apply the research achievements as a starting point. Finally, because this traditional hypothesis lies in farmers are still the microscopic principal during the development of modern agriculture in China, the thesis try to build the conceptual framework of the formal demand for credit entrepreneurship of farmers,and provide a theoretical basis for the thesis in defining the basic concepts,such as the relationship between farmers and entrepreneurial farmers, credit demand, credit supply etc. In-depth analysis on samples collected by the research, on characteristics of the sample farmers (different qualities and different industries), interpretation of the different characteristics of farmer entrepreneurs, of the different characteristics of formal credit demand from different industries,and on this basis, utilize the Probit model sample to make significant test on impact factors of formal credit demand and behavior of entrepreneurs and try to answer two questions:(1) which factors influence the formal credit demand of farmers entrepreneurship and how.(2) which factors influence farmers’formal credit business behavior and how.utilize correlation analysis to try to get conclusions, that is, formal credit needs of farmers venture can’t be satisfied, and explain the root causes that farmers have difficulties in financing. On basis of the previous study, the thesis has brought out economic development policy framework of rural formal financial channels for promoting the innovation of rural finance system, to relax credit constraints, and to promote the development of farmer entrepreneurs as well.1、Main conclusions of the thesis (1) Due to the differences of characteristics and works of Entrepreneurial farmers, the formal demands of credit reflects the multi-layer and diversity. Formal financial institutions in rural areas should refine the rural financial market segments, to fully understand the credit needs of entrepreneurial farmers and provide formal credit support.(2)Formal credit demands of entrepreneurial farmers are prominently different from the ordinary farmers, the production of the formal demand for credit characterizes with long-term, large-scale and long duration.The effective satisfaction of productive credit can promote the development of the entrepreneurship of farmers, thus promoting the rural economic developments.(3)Probit models use an empirical analysis of the formal credit needs of farmers entrepreneurship, as well as affecting factors of formal credit behavior, including:family size, net income of annual household of per capita, the distance between the family site and the nearest financial institution, and the awareness to loan conditions and procedures. The main factors which affect the formal credit behavior includes:age of the head household, the educational background of the person in charge of family, the entrepreneurial business sector, the awareness to loan conditions and procedures, whether to hire labors during family entrepreneurship(4)The main reasons of financing plight to entrepreneurial farmers lies in two aspects; On one hand, the less important cause of financing difficulties comes from the constraints of demanding credit from entrepreneurial farmers. On the other hand, the main reason of financing difficulties comes out of the obvious constraints to credit supply from formal financial institutions. How to relax the credit constraints from the formal financial institutions, is to be studied in depth2、Policies and recommendationsOn the basis of Financing difficulties analysis as well as the formal credit needs of farmers entrepreneurship, policy recommendations have been proposed from these aspects below:such as building the GSP of the financial system, increasing government support to rural finance, developing credit products, and using of the credit type in flexible way, simplifying loan procedures, and expanding reasonable loan etc.