When Finance Meets the Frontlines: Lessons from Indonesia’s Circular Economy Builders

At a landfill site in Bogor, Indonesia, pavement blocks made entirely from low-value plastic waste are being laid down. These are products developed by a startup that once struggled to access capital.

In another part of Jakarta, an app-enabled waste collector earns more through route optimisation. These are not isolated moments, but signals of what is possible when inclusive climate finance meets innovation in the waste sector.

In this post, we share insights from our work with three Indonesian waste management MSMEs—Duitin, Rezycology, and PlusTik—as part of a three-month preparation phase under the Future Economy Lab. Together, we tested what it takes to build financial mechanisms that match the pace and purpose of grassroots circular economy work.

On-the-Ground Innovation Is Outpacing Investment

Indonesia has one of the most ambitious marine plastic reduction targets in the world: a 70 percent leakage reduction by 2025. But achieving that goal requires more than policy. It requires capital that flows to the informal and MSME sectors that underpin waste recovery.

Right now, over 62 percent of plastic waste in Indonesia is mismanaged. Yet, the burden of solving this crisis is falling on microentrepreneurs, informal waste collectors, and small startups, most of whom are locked out of traditional financing due to high collateral demands, rigid terms, or a lack of access to technical assistance.

What we found in Indonesia is what we have seen globally. The circular economy is growing, but the capital systems meant to support it are outdated.

The Case: Three MSMEs, One Shared Constraint

We partnered with three businesses that are leading local innovation:

• Duitin digitises waste collection for over 190,000 households and 7,700 informal workers. Ninety-eight percent of its community waste bank partners are women. To date, it has diverted 1,800 metric tonnes from landfills.

• PlusTik upcycles hard-to-recycle plastic into paving blocks and flooring. It has processed 1,500 tonnes of landfill waste and received inbound expansion interest from 11 municipalities.

• Rezycology supports over 3,500 waste microentrepreneurs across five provinces, with more than 15,000 tonnes of plastic processed through a co-ownership model rooted in dignity and transparency.

Each business operates differently, but all are stalling at the same point: accessing the kind of capital that fits their growth reality.

“This work takes time. We’re scaling behaviour change, not just business metrics.” — Adijoyo Prakoso, Co-Founder, Duitin

What We’re Learning About Financing for Circular MSMEs

From this initiative, five themes emerged:

1. A Strong Team Is a Scaling Strategy Business expansion, fundraising, and compliance all require time, trust, and talent. But waste sector stigma makes it difficult to attract and retain managers, especially younger professionals. Financial and HR support must go hand in hand.

2. Plastic Credits Hold Promise, but Need Scaffolding Only one company had begun exploring the plastic credit market prior to this phase. With guidance from PCX Solutions, two were able to complete mock registrations. However, awareness, regulation, and capacity remain barriers.

3. Technology Must Be Grounded in Human Experience Waste traceability platforms only work when designed with informal workers in mind. Low connectivity, tech literacy, and cost barriers can render digital tools inaccessible. MSMEs need digital infrastructure that complements, not replaces, community wisdom.

4. Finance Without Capacity Building Is a Half-Solution From financial forecasting to customer acquisition, MSMEs identified technical support needs that go far beyond capital. Embedding technical assistance into funding structures is not a bonus, it is foundational.

5. Flexible Capital Reflects Real Impact Patient capital, revenue-sharing tied to environmental outcomes such as plastic credits, and non-collateralised loans are all better aligned with how value is created in this sector. Capital must reflect the long-term nature of systems change.

Four Provocations for Funders and Investors

• What if due diligence timelines were flexible enough to include trust-building with informal workers?

• Can we design financing models that recognise unpaid labour, gendered responsibilities, and circular impact?

• Are we measuring risk based on the funder's tolerance or the community's lived experience?

• How might we redefine “returns” to include livelihood resilience, reduced waste, and dignity?

Back to Galuga: Why We’re Building This Fund

Standing at PlusTik’s pilot site, surrounded by once-worthless plastic now turned into pavement blocks, the value of reimagining the capital was clear. Indonesia doesn’t lack innovation, it lacks financial systems that recognize and amplify it. We were seeing a new economic logic—one that values people, place, and planet in equal measure.

The innovations are already here. What is missing is a financial mechanism designed for their reality.

We’re co-designing that mechanism. If you're working toward an economy that centres inclusion, climate resilience, and circularity, we invite you to join us.

Let’s move from pilot to practice, together.

Watch the full video on this work below: