Purpose- The purpose of the current study is to investigate the public and private financing obstacles to medium- and small-scale entrepreneurs in rural areas in Iran. Design/methodology/approach- Descriptive analytic research method is used for collecting field data among 5,770 owners of entrepreneurial businesses located in rural areas of Mashhad in 2015. Findings- The results showed that there are numerous public and private obstacles in rural entrepreneurship financing in Iran, which are the main factors for short-term loan repayment in public sector, and in the private sector, they result in entrepreneurs’ lack of access to the source of financing. Moreover, there are a variety of financing methods for entrepreneurship in rural areas, among which personal resources and borrowings are the most important ones. Thus, lack of serious and persistent governmental support from local entrepreneurs causes many entrepreneurial failures at the early stages of entrepreneurial activity in villages of Iran. Originality/value- So far, few studies have been conducted on the subject of the study; hence, the results of the current study may be helpful to the developing nations.

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