Utilising waste from food products is a crucial pillar of sustainability. In tropical countries, bananas are widely used in various cuisines, generating substantial waste, particularly in the form of peels. Banana peels are known to harbor a rich reservoir of beneficial indigenous microorganisms (IMO) that promote crop growth, which can be further enhanced through fermentation. Applying this to a sustainable crop like mushrooms further amplifies the impact of the waste. In this study, banana peels were fermented with molasses for 4 days to enrich the IMO in the substrate. The bacterial isolates were characterised via sequencing and microscopic identification. For application on mushrooms (Pleurotus ostreatus), the isolates were tested for antifungal activity against the mushroom pathogen Trichoderma sp., which was isolated and molecularly identified from contaminated mushrooms in the field, appearing as greenish-white growth in mushroom blocks. Subsequently, the inhibitory activity of consortia or single bacteria was measured in vitro against this pathogenic fungus. To measure their impact on mushroom growth, the bacteria were applied at 2-week intervals, and mushroom growth was monitored. Results indicated that fermentation significantly increased the number of lactic acid bacteria (LAB) on day four, outgrowing other types of bacteria. The antifungal activity on Trichoderma sp. showed that Liquorilactobacillus mali, Leuconostoc mesenteroides, and Lactiplantibacillus plantarum had the highest antifungal capability in inhibiting Trichoderma sp. These bacterial isolates also significantly impacted mushroom growth, with the shortest time to first harvest (6–10 days) compared to the control treatment, which commonly takes up to 1 month. Overall, the study demonstrates that fermenting banana peels with molasses enriches beneficial bacteria, which can effectively inhibit pathogenic fungi and enhance the growth of oyster mushrooms, demonstrating a sustainable approach to waste utilisation.