Study of the Factors Influencing Entrepreneurial Farmers' Formal Financial Credit Demand and Credit Constraints in Sichuan and Chongqing

Based on a survey of 939 farmers in Sichuan and Chongqing, this paper analyzes the influencing factors of entrepreneurial farmers’ formal financial credit demands and credit constraints with Probit model. It is found that entrepreneurial farmers have strong demand for formal financial credit, which is mainly production investment demand, but the formal financial credit constraint is obvious. Family size, cognition of loan procedures and conditions have a positive effect on entrepreneurial farmers’ formal financial demand, while family per capita income, the distance between family location and the nearest formal financial organization, have negative influence. The relationship between householder’ age and entrepreneurial farmers’ successful formal loan presents inverted U shape, and educational level presents a negative correlation with successful loan. Compared with the traditional scale agricultural business, farmers engaged in other entrepreneurial businesses would get loan from formal financial institutions more difficultly. Understanding level of the loan procedures and conditions has a positive effect on successful loan. Compared with entrepreneurial farmers without employment, employed farmers are more likely to get loans. Statistically, householder’ age and educational level, entrepreneurial business choices do not have significant effect on entrepreneurial households’ formal financial credit demands. Family size, family per capital income, the distance between family location and the nearest formal financial organization, and the size of loan do not have significant influence on entrepreneurial households’ successful loan. To get rid of formal financial credit constraints, we must implement the incremental reform of financial institutions, promote the formal finance of the villages and towns which can adapt to the farmers' financial demand, and create a good financial environment. Meanwhile, it is necessary to give impetus to innovation of financial management, products and services, reduce credit threshold, and adapt to the characteristics and demands of entrepreneurial households.