Factor Influencing the Own-Business Start-up in Rural Areas of Iran

The encouragement and development of entrepreneurship in rural areas and start-up of own businesses depend on several factors and inputs, one of the most important of which is access to credit and capital. Therefore, this survey study aimed to investigate the factors influencing the start-up of own-businesses among the micro-credit recipients of Bank Keshavarzi Iran (AgriBank of Iran) in rural areas of Qom province of Iran. The statistical population included 24980 micro-credit barrowers (credits less than 500 million IR rials) from rural branches of AgriBank of the province in the last five years. Using Cochran formula, the sample size was determined 255 individuals. Multi-stage cluster sampling method in four districts and eight villages were used to select samples. The results of estimated possibility logit model for the own-business start-up indicated significantly positive relations and the impacts of several variables including marital status, self-employed household members, personal brought land, personal brought water and also social status, commitment to the AgriBank, spirit and entrepreneurial attitude and risk taking indicators with 99 percent confidence as well as the other variables including previous job background, type of loan, monitoring the use of loans and private investment with 95 percent confidence, while the variable of waiting period to get the loan had a significantly negative impact with 99 percent confidence. Finally, it was recommended that prior to the allocation of credits, the applicants' entrepreneurial attitudes; risk taking, social status, and commitment to the bank should be evaluated through the standard scale.