Research On Formal Credit Constraints Of Situ Entrepreneurial Farmers

Since the reform and opening up, China’s rural economy has achieved great development, the income of farmers are rising up, while comparing with urban development, the development gap between urban and rural has continued to increase, the main reasons are as following: First, the profit of traditional industries are still declining in rural areas; Second, for the household registration system, the social capital and the quality of the farmers themselves together with other individuals affected by certain arrest in economic development and the transfer of rural surplus labor. Meanwhile the education of rural children and care of the elderly left behind in the transfer of rural surplus labor to city, the urban crowding and other problems have becoming increasingly serious in recent years. In view of this, the farmers to start businesses in local are drawing attention of scholars and government. Farmers who start entrepreneurial activity in local turned into general. Promoting employment through entrepreneurship has becoming an important way to improve farmers’ income and to solve their livelihood. However, due to historical reasons and institutional inertia, the status of rural farmer’s venture and capital outflows yet to be fundamentally changed. In this regard, how to clearly the factors of formal credit constraints faced by farmers in entrepreneurship, thereby improving the entrepreneurial environment, not only about cracking loan difficulties to farmers, also in line with national guidance and assistance to help rural youth and migrant workers return home to start entrepreneurship in new era.Based on this, the article regards entrepreneurial farmers in local as a research object, through the way of theoretical analysis and empirical analysis, clearing the actual factors of formal credit constraints faced by entrepreneurial farmers, which analysis the four aspects of the individual characteristics, social capital, a priori knowledge and the social environment. The article is divided into seven parts, the first part briefly introduces the research background of entrepreneurial activity and regular credit constraints,then regards farmers to start businesses in local which facing the formal credit constraints as research topic; the second part is theoretical analysis of the farmers entrepreneurial activity,the formal credit constraints and their relations; the third part are statistical analysis by obtain relevant data in field research; then the fourth and fifth parts are both using Binary Logistic model to measure and inspect,which conclude a brief analysis of the measurement results and clear the impact factors of credit constraints faced by entrepreneurial farmer in local; the sixth part gives the propose appropriate countermeasures.Farmers start business in local as a new economic and social phenomenon, the related research is still infancy. In this paper, the studies regard biological and geographical advantages around at home in the new mode of operation, including new type of modern agriculture as a new business. There is a certain innovation compared with the definition of entrepreneurship in before literature. The main conclusions include: Formal credit constraints are a major factor in deciding whether to start entrepreneurship. Formal credit constraints and entrepreneurial behavior have the significant negative correlation. Education level has a significant negative impact on credit constraints faced by farmers in individual characteristics. Relative resources of entrepreneurship have significant negative impact on formal credit constraints faced by farmers in social capital. Whether there have training experience of entrepreneurship has a significant negative impact on the formal credit constraints faced by farmers in prior knowledge. Preferential policies to encourage and to guide the entrepreneurs in local together with the term of current bank loans have significant positive impact on the formal credit constraints faced by farmers in social environment. To alleviate formal credit constraints of local entrepreneurial farmers faced, the government should act as a startup guide. Besides, building a startup hub, at the same time promoting the comprehensive qualities of the whole local entrepreneurial farmers. The most important point is solving venture capital, including expanding farmers’ venture financing channels, building the credit guarantee system, increasing financial support.