Dutch Envoy Urges Shift From Grants to Loans as AVSI Wraps Up Nakivale Project

The Embassy of the Kingdom of the Netherlands has advocated for a strategic shift from traditional humanitarian grants to sustainable entrepreneurship and investment within refugee-hosting communities in Uganda. Bouwe-Jan Smeding, the Dutch Deputy Ambassador, made these remarks during the official closure of the AVSI Foundation’s Y-Connect project at the Nakivale Refugee Settlement.

Smeding challenged development partners to critically reconsider how aid is delivered, noting that fragmented interventions often see numerous organizations implementing short-term projects in the same regions. He questioned the long-term impact of communities managing dozens of concurrent, short-lived programs, emphasizing that real change requires robust support for government-led transitions.

Highlighting the economic potential within Nakivale, Smeding pointed to successful agricultural initiatives where beneficiaries scaled modest seed capital into substantial earnings through cabbage and tomato farming. However, he argued that true entrepreneurship involves taking calculated risks and utilizing credit facilities rather than relying solely on grants.

To maximize the reach of development capital, Smeding proposed replacing conventional grant structures with revolving loan funds. Under this model, funds repaid by successful borrowers could be reinvested to support new entrepreneurs, effectively doubling the beneficiary reach without expanding the initial budget. The Dutch embassy urged the Ugandan government, UN agencies, and NGOs to adopt scalable, market-driven approaches as global donor funding faces mounting pressures.

Read more details on the Nile Post.