Impact of Environmental Factors on Financing Agriculture Entrepreneurs

A common agricultural policy is important to help young farmers to start up their businesses. Such policies encourage entrepreneurs to establish agricultural ventures and nonagricultural businesses that lead to rural development and motivate young people in rural areas. The aim of this paper is to clarify the main environmental factors influencing the financing of small projects. It proposes to measure the extent to which the social, economic, legal and institutional environment can contribute to encouraging entrepreneurial projects, especially those in the agricultural field in Dongola-Soudan. The results reveal that the economic environment positively and significantly influences the financing of small projects. Conditions related to demand and product prices and the availability of inputs, as well as banks’ strategies in promoting agricultural investment, are the major economic policies to promote agricultural entrepreneurship. Unfortunately, in fewer developing countries the institutional, legal and social environment, from the point of view of 56 surveyed bankers, is still immature, and no significant correlation emerges in the model. The paper outlines that less developed countries have to modernize institutions and business law.