Legal Literacy - Micro, Small, and Medium Enterprises (MSMEs) are the backbone of the Indonesian economy. According to the Central Statistics Agency (BPS), in 2024, MSMEs contributed approximately 61.07% to the national Gross Domestic Product (GDP) and absorbed more than 97% of the workforce in Indonesia (BPS, 2024)¹. Despite this significant contribution, MSMEs still face various challenges, especially in terms of legal protection. Without a clear legal framework, MSMEs are vulnerable to various risks, ranging from unfair competition to problems with accessibility to financing. In this paper, we will discuss why MSMEs without a legal framework become vulnerable and marginalized in the context of the Indonesian economy. 

Legal protection for MSMEs is very important to create a conducive business environment. With clear regulations, MSME actors can operate more safely and confidently. According to data from the Financial Services Authority (OJK), only about 20% of MSMEs have access to formal financing, while the rest have to rely on informal sources of financing that are often unclear (OJK, 2024)². This shows an urgent need to provide better legal protection for MSMEs so that they can get better access to financing. 

In this context, the legal framework not only functions as a means of protection, but also as a driver of growth. With legal certainty, investors will be more interested in investing their capital in the MSME sector. For example, in developed countries such as Germany and Japan, strong legal protection for MSMEs has significantly driven the growth of this sector (Fajarihza & Rini, 2025)³.