This blog is part of a series featuring the 2026 YPG Mentorship Programme participants and their valuable learnings in the field of solid waste management and the circular economy.
Mentee: Kartik Kapoor
Mentor: Yusuf Adelodun
As part of my mentorship with ISWA YPG, I connected with Yusuf Adelodun from Nigeria to explore how our respective field experiences in the waste sector compare. Our discussions revealed striking parallels: despite clear demand, intent, and even capital flows, waste businesses continue to struggle with financial sustainability and scaling. To explore this further, we conducted a network-based survey around the themes emerging from our conversations. The survey was conducted among individuals across various sectors of the waste management value chain, including municipalities, government regulatory agencies, private companies, MSMEs/SMEs, the informal sector (waste pickers/aggregators), NGOs, financial institutions, EPR organizations, consultants, academics, and researchers. Following a thorough and critical examination of the responses received, our findings and observations are presented below.
We began by examining how waste businesses are financed. Most build their capital structure through a mix of personal equity, grants, and informal lending, while access to formal finance is widely rated as “very difficult.” Although funding exists in the system, it is rarely accessible on viable terms. To bridge financial gaps, businesses often rely on subsidies, EPR mechanisms, grants, and CSR funding. This raises an important question: where does waste function as a viable enterprise, and where does it remain a socially driven activity?
Respondents, including MSMEs, NGOs, and regulators, reported frequent operational challenges. These include technology mismatches (machines that lack maintenance ecosystems or are not viable given revenue realities), high energy costs, weak data monitoring systems, and a lack of skilled workers. We also observed that project planning is often overly optimistic, particularly in estimating feedstock availability and contamination levels. In addition, control over waste—often shaped by informal power structures, corruption, or “waste mafia” dynamics—can significantly constrain business operations and, in some cases, lead to closures.
The Financial challenges validated that making bankable projects is not a major issue, but the challenges lie in practice, particularly when accessing loans is difficult due to high interest rates. And then the revenue models in waste projects are weak or unclear, such as delayed municipal payments – creating a credit crunch, cost of maintenance, low tipping fees, and unreliable EPR, with inflation adding to expenses. As a result, many projects and businesses are donor-led, limiting their sustainability after funding ends. Governance systems were also rated “fair to poor” overall, which most of the pointers from our discussion rated high in the survey. Regulatory uncertainty, inconsistent government policies, a lack of political will, and overlapping functions among regulatory agencies are major challenges for businesses. Sometimes, government officials also operate businesses and escape taxes while reaping benefits from various business support schemes, thereby limiting the chances of survival of an ordinary investor. To us, the lack of structured support for small-scale businesses was a key concern, as there are few opportunities for them to have long-term, predictable business models.
Several structural gaps stand out. These include the absence of de-risking instruments such as guarantees and blended finance, limited collaboration between formal and informal actors, and a lack of stable, predictable tariffs. While EPR frameworks are generally seen as supportive, their effectiveness is undermined when they fail to adequately fund collection systems. In the network survey, for Nigeria (majority responses), overlapping agencies and “waste mafia” hinder progress; Indian respondents echoed EPR implementation lags.
During mentorship, Yusuf and I shared views on growing waste markets in India and Nigeria, which mirror each other and certainly do in most of the global south geographies. Entrepreneurial activity is visible, yet high barriers persist—the core issue is not the absence of ideas or intent, but the difficulty of translating them into financially viable and operationally resilient models. Common threads in our interactions include operational challenges such as poor segregation, unclear revenue streams, and high operational costs. Institutional issues such as overlapping mandates and inconsistent policies were also observed.
Key recommendations emerging from this work include strengthening financial management capacity through targeted training and toolkits, improving access to low-interest loans and essential infrastructure (such as land and utilities), and harmonizing regulatory frameworks. There is also a need to expand and enforce EPR systems, strengthen market linkages for recyclables, and provide technical assistance to help businesses develop realistic and bankable models. It is also very important to conduct adequate stakeholder engagement in policy development and implementation. Underpinning all of this is a fundamental requirement: without effective waste segregation, no system can function efficiently. Recycling businesses should be supported and provided with an enabling environment to make them viable and bankable.
