The insurance industry just like the banking industry, remains largely underdeveloped. The products offered by these companies are limited to life and nonlife insurance products. In spite of the fact that agriculture is the backbone of the economy, Uganda lacks agricultural insurance, weather indexing of agricultural production and micro insurance for low income groups.
The natural interest rate, or r* as it is often called, is the interest rate at which the demand for, and supply of, capital are in equilibrium, and the economy operates at full employment. If the central bank wants to cool off the economy and bring inflation down, it needs to set its policy interest rate above the natural rate.