Although the informal sector of waste collection has an important role in income diversification for the poor and contribution to waste recycling, this sector is still not recognised in any government official policies and is usually underestimated in the Mekong Delta of Vietnam. This paper employs a systems thinking approach to analyse the crucial roles of the informal sector in solid waste management (SWM) system in Vietnam. From a circular economy viewpoint, the flow diagram was built for the first time, which could integrate the actors and activities of the informal sector into a wider SWM system in Vietnam. The map focuses on analysing the contributions and activities of the informal sector, focusing on its roles and impacts on the recycling system. This paper then employed the systems thinking approach to further analyse the systematic problem of the informal sector. The analysis builds on the field survey including elements and key driving forces of the systems with 36 scrap dealers, 127 scrap buyers, and 760 households and in-depth interviews with experts in the Mekong Delta region, Vietnam. Based on the practices and experience in waste-related activities of informal sector, this sector should be integrated into the general waste management process. With the relevance of informal systems, the authorities could establish an effective waste recycling system, and improve the livelihoods and working conditions of those involved, especially the poor.