The Indonesian government has realized the importance of legal protection for MSMEs and has taken several steps to provide a legal framework. One of these steps is through the issuance of Law No. 20 of 2008 concerning MSMEs, which provides a legal basis for the development of MSMEs in Indonesia. However, the implementation of this law still faces various obstacles. 

Data from the Directorate General of AHU of the Ministry of Law and Human Rights shows that only about 30% of MSMEs have been officially registered, even though this registration is important to obtain legal protection (Ditjen AHU, n.d.)⁷. Therefore, further efforts are needed to increase the awareness of MSME actors about the importance of business legality. 

The Role of Society and Communities in Supporting MSMEs

In addition to the role of the government, society and communities also have a responsibility to support MSMEs. The public can play an active role by buying local products and supporting small businesses around them. In addition, communities can also help provide education about the importance of business legality and legal protection for MSME actors. 

Several community initiatives have proven effective in providing support to MSMEs. For example, business mentoring programs held by various non-governmental organizations have succeeded in increasing the awareness of MSME actors about the importance of legal protection and access to financing (Novamalinda, 2023)⁸.  

Conclusion

MSMEs are an important pillar in the Indonesian economy, but they still face many challenges, especially in terms of legal protection. Without a clear legal framework, MSMEs become vulnerable and marginalized, which has a negative impact not only on them but also on the national economy as a whole. Therefore, collaborative efforts between the government, society, and communities are needed to provide better support for MSMEs. Only in this way can we ensure that MSMEs can contribute optimally to Indonesia's economic development. 

Reference

  1. Statistics Indonesia. (March 1, 2024). Position of Micro, Small, and Medium Enterprise (MSME) Credit in Commercial Banks. Accessed February 24, 2025, from [BPS](https://www.bps.go.id/id/statistics-table/2/MTk2MiMy/posisi-kredit-usaha-mikro--kecil--dan-menengah--umkm-sup1-sup-pada-bank-umum.htmlFinancial Services Authority. (2024). OJK's new path: making MSME financing access easier. Accessed February 24, 2025, from [OJK](
  2. Fajarihza, R. F., & Rini, A. S. (2025, February 11). MSME Credit Grows Short in 2024, OJK Reveals the Reasons. Bisnis.com. Retrieved from [Bisnis](https://indonesia.go.id//kategori/editorial/8630/jalan-baru-ojk-agar-akses-pembiayaan-umkm-lebih-mudah?lang=1?lang=1Financial Services Authority. (2024). OJK's new path: making MSME financing access easier. Accessed February 24, 2025, from [OJK](
  3. Statistics Indonesia. (September 18, 2024). Number of Micro and Small Scale Industrial Companies by Province. Accessed February 24, 2025, from [BPS](https://finansial.bisnis.com/read/20250211/90/1838746/kredit-umkm-tumbuh-cekak-pada-2024-ojk-buka-bukaan-alasannya)
  4. Izzuddin, H., & Shaidra, A. (2024, November 27). Write-off of MSME non-performing loans: Banks are still verifying data, OJK is ready to remove SLIK records. Tempo. Retrieved from [Tempo](https://www.bps.go.id/id/statistics-table/2/NDQwIzI=/jumlah-perusahaan-industri-skala-mikro-dan-kecil-menurut-provinsi.htmlFinancial Services Authority. (2024). OJK's new path: making MSME financing access easier. Accessed February 24, 2025, from [OJK](
  5. Puspadini, M. (2025, February 11). Bank's MSME Credit Plummets, This is OJK's Explanation. CNBC Indonesia. Retrieved from [CNBC](https://www.tempo.co/ekonomi/penghapusan-piutang-macet-umkm-bank-masih-verifikasi-data-ojk-siap-hapus-catatan-slik-1173736Financial Services Authority. (2024). OJK's new path: making MSME financing access easier. Accessed February 24, 2025, from [OJK](
  6. Directorate General of AHU. (n.d.). Business Legality is the Future Investment of MSMEs. Retrieved from [Ditjen AHU](https://www.cnbcindonesia.com/market/20250211140720-17-609752/kredit-umkm-bank-terpuruk-ini-penjelasan-ojkFinancial Services Authority. (2024). OJK's new path: making MSME financing access easier. Accessed February 24, 2025, from [OJK](
  7. Novamalinda. (2023, November 7). Business Legal Counseling for MSME Business Actors. Retrieved from [UGM](https://portal.ahu.go.id/id/detail/75-berita-lainnya/5158-ditjen-ahu-legalitas-usaha-adalah-investasi-masa-depan-umkmFinancial Services Authority. (2024). OJK's new path: making MSME financing access easier. Accessed February 24, 2025, from [OJK](
  8. /)https://law.ugm.ac.id/penyuluhan-hukum-bisnis-bagi-para-pelaku-usaha-umkm/)