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The informal sector generally includes small-scale manufacturing products and low provision of services. Their entrepreneurs have no registered license and do not pay taxes according to government policy. They mainly involved the waste recycling activities for screening of recyclable and reusable materials from disposed solid waste items. These activities depicted the informal sector as labour-intensive, low earning, unrecorded and unregulated work. They are either operated as micro enterprises (up to 10 group members) and small enterprises (20-30 group) with low capital investment. These entrepreneurs applied their innovative skill to improve market values of collected solid waste items. The informal sectors for solid waste management systems generally operate at a low standard due to lack of funds, and availability of low-skilled labour force. The major challenges in informal sectors are inappropriate solid waste collection points and improper disposal in open dumps. These improper disposal activities are considered as backward, unhygienic, and highly unregulated informal systems. On the other hand, modern waste management follows the R3 principle (reducing the disposal of items, reuse of wasted items and recycling process) and acts as an efficient recycling system for these products to move up the waste hierarchy. This chapter will provide information for an effective sustainable role of informal waste recycling and modern waste management in developing countries. The local economy, policies and their characteristics for concerns of informal solid waste management has been also discussed. Enzymatic, fermentative approach and valorisation processes for bioconversion of biodegradable waste product into value added industrial products through modern waste management process have been simultaneously discussed.