Application of Deterministic Multiple Linear Regression and Stochastic Analysis Through Monte Carlo Simulation to Model Loan Consumption Assuming Kenyan Data

Conlet Biketi Kikechi; Dau Malek Dau

doi:doi:10.11648/j.ajtas.20241305.14

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Application of Deterministic Multiple Linear Regression and Stochastic Analysis Through Monte Carlo Simulation to Model Loan Consumption Assuming Kenyan Data

Conlet Biketi Kikechi^*

, Dau Malek Dau

Published in American Journal of Theoretical and Applied Statistics (Volume 13, Issue 5)

Received: 28 August 2024 Accepted: 24 September 2024 Published: 18 October 2024

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Abstract

The main focus of this survey is to examine the key determinants of loan consumption in Kenya, with a keen focus on variables such as monthly expenditure per adult, deposits, economic strength index, and diverse economic opportunities. The study's target population is Kenyan citizens aged 18 years and above. The study obtains data from the Kenya national census, aggregated at the county level. The literature review section presents sufficient support for the study’s hypothesis. In particular, the authors highlight Kenya as a country with one of the highest loan consumption in Africa, which plays as a motivation for conducting this survey. The survey methodology involves the use of quantitative analysis using descriptive statistics like tables, graphs and charts, deterministic multiple linear regression, and stochastic analysis through Monte Carlo simulation. The results of the survey show that monthly expenditure per adult, deposits, and economic strength index have a significant impact on loan consumption amount; that is, R-squared is equal to 0.88. The implication of this survey is based on its contribution to the understanding of loan consumption behaviors in Kenya, presenting relevant insights for policymakers, financial institutions, and other stakeholders in the lending and borrowing processes. The outcome has the potential to inform loan structure policies to enhance the promotion of responsible and sustainable loan consumption.

Published in	American Journal of Theoretical and Applied Statistics (Volume 13, Issue 5)
DOI	10.11648/j.ajtas.20241305.14
Page(s)	138-156
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Multiple Linear Regression, Stochastic Analysis, Monte Carlo Methods, Descriptive Statistics, Loan Consumption, Economic Strength Index

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APA Style

Kikechi, C. B., Dau, D. M. (2024). Application of Deterministic Multiple Linear Regression and Stochastic Analysis Through Monte Carlo Simulation to Model Loan Consumption Assuming Kenyan Data. American Journal of Theoretical and Applied Statistics, 13(5), 138-156. https://doi.org/10.11648/j.ajtas.20241305.14

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ACS Style

Kikechi, C. B.; Dau, D. M. Application of Deterministic Multiple Linear Regression and Stochastic Analysis Through Monte Carlo Simulation to Model Loan Consumption Assuming Kenyan Data. Am. J. Theor. Appl. Stat. 2024, 13(5), 138-156. doi: 10.11648/j.ajtas.20241305.14

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AMA Style

Kikechi CB, Dau DM. Application of Deterministic Multiple Linear Regression and Stochastic Analysis Through Monte Carlo Simulation to Model Loan Consumption Assuming Kenyan Data. Am J Theor Appl Stat. 2024;13(5):138-156. doi: 10.11648/j.ajtas.20241305.14

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@article{10.11648/j.ajtas.20241305.14,
  author = {Conlet Biketi Kikechi and Dau Malek Dau},
  title = {Application of Deterministic Multiple Linear Regression and Stochastic Analysis Through Monte Carlo Simulation to Model Loan Consumption Assuming Kenyan Data
},
  journal = {American Journal of Theoretical and Applied Statistics},
  volume = {13},
  number = {5},
  pages = {138-156},
  doi = {10.11648/j.ajtas.20241305.14},
  url = {https://doi.org/10.11648/j.ajtas.20241305.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtas.20241305.14},
  abstract = {The main focus of this survey is to examine the key determinants of loan consumption in Kenya, with a keen focus on variables such as monthly expenditure per adult, deposits, economic strength index, and diverse economic opportunities. The study's target population is Kenyan citizens aged 18 years and above. The study obtains data from the Kenya national census, aggregated at the county level. The literature review section presents sufficient support for the study’s hypothesis. In particular, the authors highlight Kenya as a country with one of the highest loan consumption in Africa, which plays as a motivation for conducting this survey. The survey methodology involves the use of quantitative analysis using descriptive statistics like tables, graphs and charts, deterministic multiple linear regression, and stochastic analysis through Monte Carlo simulation. The results of the survey show that monthly expenditure per adult, deposits, and economic strength index have a significant impact on loan consumption amount; that is, R-squared is equal to 0.88. The implication of this survey is based on its contribution to the understanding of loan consumption behaviors in Kenya, presenting relevant insights for policymakers, financial institutions, and other stakeholders in the lending and borrowing processes. The outcome has the potential to inform loan structure policies to enhance the promotion of responsible and sustainable loan consumption.
},
 year = {2024}
}

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TY  - JOUR
T1  - Application of Deterministic Multiple Linear Regression and Stochastic Analysis Through Monte Carlo Simulation to Model Loan Consumption Assuming Kenyan Data

AU  - Conlet Biketi Kikechi
AU  - Dau Malek Dau
Y1  - 2024/10/18
PY  - 2024
N1  - https://doi.org/10.11648/j.ajtas.20241305.14
DO  - 10.11648/j.ajtas.20241305.14
T2  - American Journal of Theoretical and Applied Statistics
JF  - American Journal of Theoretical and Applied Statistics
JO  - American Journal of Theoretical and Applied Statistics
SP  - 138
EP  - 156
PB  - Science Publishing Group
SN  - 2326-9006
UR  - https://doi.org/10.11648/j.ajtas.20241305.14
AB  - The main focus of this survey is to examine the key determinants of loan consumption in Kenya, with a keen focus on variables such as monthly expenditure per adult, deposits, economic strength index, and diverse economic opportunities. The study's target population is Kenyan citizens aged 18 years and above. The study obtains data from the Kenya national census, aggregated at the county level. The literature review section presents sufficient support for the study’s hypothesis. In particular, the authors highlight Kenya as a country with one of the highest loan consumption in Africa, which plays as a motivation for conducting this survey. The survey methodology involves the use of quantitative analysis using descriptive statistics like tables, graphs and charts, deterministic multiple linear regression, and stochastic analysis through Monte Carlo simulation. The results of the survey show that monthly expenditure per adult, deposits, and economic strength index have a significant impact on loan consumption amount; that is, R-squared is equal to 0.88. The implication of this survey is based on its contribution to the understanding of loan consumption behaviors in Kenya, presenting relevant insights for policymakers, financial institutions, and other stakeholders in the lending and borrowing processes. The outcome has the potential to inform loan structure policies to enhance the promotion of responsible and sustainable loan consumption.

VL  - 13
IS  - 5
ER  -

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Author Information

Conlet Biketi Kikechi

School of Mathematics, University of Nairobi, Nairobi, Kenya; Department of Mathematics and Computer Science, Pwani University, Kilifi, Kenya; Department of Business Management and Economics, Pwani University, Kilifi, Kenya

Contact Email

http://orcid.org/0009-0002-0989-3127
Dau Malek Dau

School of Mathematics, University of Nairobi, Nairobi, Kenya

Contact Email

http://orcid.org/0009-0006-5271-8630

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APA Style

Kikechi, C. B., Dau, D. M. (2024). Application of Deterministic Multiple Linear Regression and Stochastic Analysis Through Monte Carlo Simulation to Model Loan Consumption Assuming Kenyan Data. American Journal of Theoretical and Applied Statistics, 13(5), 138-156. https://doi.org/10.11648/j.ajtas.20241305.14

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ACS Style

Kikechi, C. B.; Dau, D. M. Application of Deterministic Multiple Linear Regression and Stochastic Analysis Through Monte Carlo Simulation to Model Loan Consumption Assuming Kenyan Data. Am. J. Theor. Appl. Stat. 2024, 13(5), 138-156. doi: 10.11648/j.ajtas.20241305.14

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AMA Style

Kikechi CB, Dau DM. Application of Deterministic Multiple Linear Regression and Stochastic Analysis Through Monte Carlo Simulation to Model Loan Consumption Assuming Kenyan Data. Am J Theor Appl Stat. 2024;13(5):138-156. doi: 10.11648/j.ajtas.20241305.14

Copy | Download

@article{10.11648/j.ajtas.20241305.14,
  author = {Conlet Biketi Kikechi and Dau Malek Dau},
  title = {Application of Deterministic Multiple Linear Regression and Stochastic Analysis Through Monte Carlo Simulation to Model Loan Consumption Assuming Kenyan Data
},
  journal = {American Journal of Theoretical and Applied Statistics},
  volume = {13},
  number = {5},
  pages = {138-156},
  doi = {10.11648/j.ajtas.20241305.14},
  url = {https://doi.org/10.11648/j.ajtas.20241305.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtas.20241305.14},
  abstract = {The main focus of this survey is to examine the key determinants of loan consumption in Kenya, with a keen focus on variables such as monthly expenditure per adult, deposits, economic strength index, and diverse economic opportunities. The study's target population is Kenyan citizens aged 18 years and above. The study obtains data from the Kenya national census, aggregated at the county level. The literature review section presents sufficient support for the study’s hypothesis. In particular, the authors highlight Kenya as a country with one of the highest loan consumption in Africa, which plays as a motivation for conducting this survey. The survey methodology involves the use of quantitative analysis using descriptive statistics like tables, graphs and charts, deterministic multiple linear regression, and stochastic analysis through Monte Carlo simulation. The results of the survey show that monthly expenditure per adult, deposits, and economic strength index have a significant impact on loan consumption amount; that is, R-squared is equal to 0.88. The implication of this survey is based on its contribution to the understanding of loan consumption behaviors in Kenya, presenting relevant insights for policymakers, financial institutions, and other stakeholders in the lending and borrowing processes. The outcome has the potential to inform loan structure policies to enhance the promotion of responsible and sustainable loan consumption.
},
 year = {2024}
}

Copy | Download

TY  - JOUR
T1  - Application of Deterministic Multiple Linear Regression and Stochastic Analysis Through Monte Carlo Simulation to Model Loan Consumption Assuming Kenyan Data

AU  - Conlet Biketi Kikechi
AU  - Dau Malek Dau
Y1  - 2024/10/18
PY  - 2024
N1  - https://doi.org/10.11648/j.ajtas.20241305.14
DO  - 10.11648/j.ajtas.20241305.14
T2  - American Journal of Theoretical and Applied Statistics
JF  - American Journal of Theoretical and Applied Statistics
JO  - American Journal of Theoretical and Applied Statistics
SP  - 138
EP  - 156
PB  - Science Publishing Group
SN  - 2326-9006
UR  - https://doi.org/10.11648/j.ajtas.20241305.14
AB  - The main focus of this survey is to examine the key determinants of loan consumption in Kenya, with a keen focus on variables such as monthly expenditure per adult, deposits, economic strength index, and diverse economic opportunities. The study's target population is Kenyan citizens aged 18 years and above. The study obtains data from the Kenya national census, aggregated at the county level. The literature review section presents sufficient support for the study’s hypothesis. In particular, the authors highlight Kenya as a country with one of the highest loan consumption in Africa, which plays as a motivation for conducting this survey. The survey methodology involves the use of quantitative analysis using descriptive statistics like tables, graphs and charts, deterministic multiple linear regression, and stochastic analysis through Monte Carlo simulation. The results of the survey show that monthly expenditure per adult, deposits, and economic strength index have a significant impact on loan consumption amount; that is, R-squared is equal to 0.88. The implication of this survey is based on its contribution to the understanding of loan consumption behaviors in Kenya, presenting relevant insights for policymakers, financial institutions, and other stakeholders in the lending and borrowing processes. The outcome has the potential to inform loan structure policies to enhance the promotion of responsible and sustainable loan consumption.

VL  - 13
IS  - 5
ER  -

Copy | Download