In accordance with ASTM D638, the study investigates and analyses the mechanical and thermal properties of banana bagasse fibre and epoxy resin as a natural hybrid composite material, being biodegradable and recyclable. The objective of the work is to develop composite materials for packaging and transportation of light and medium weight mechanical components. Using epoxy resin and hardener, hand laminates with different compositions and fibre orientations were prepared. The mechanical properties of the banana-bagasse hybrid composite were improved by adding bagasse fibres with nanoparticles, which acted as positive reinforcement and gave the composite higher strength and a smooth surface. The flexibility of the composite was provided by the banana fibres. The samples contained a banana fibre content of 60-65% and a bagasse fibre concentration between 35-40% according to ASTM D790. For the nonwoven with nano-clay powder, the maximum tensile test value is 319.24 MPa, and the flexural strength was high at 664.2 Mpa for the cross-ply laminate with nano-clay inclusion. Tensile strength is increased by the use of nanoclay powder. ASTM standard specimens are subjected to tensile, impact and thermogravimetric tests. Test results can be validated by comparison with natural fibre composites with and without inclusion of nanoclay. In the ASTM E1131 TGA test, natural fibre reinforced composites with 1% inclusion of nanoclay performed better than pure composites. In terms of residual weight, weight loss, derived weight, and heat resistance, the cross-ply and angled-ply specimens performed better than the unidirectional composites.