The Impact of Small Loan Company Development on Carbon Emission Intensity in the Yangtze River Delta Urban Agglomeration

Financial development can influence carbon emissions through capital allocation, technological support, and policy transmission. To investigate the inherent association between grassroots inclusive financial institutions and territorial green transformation, this study establishes a city-level panel dataset of the Yangtze River Delta urban agglomeration covering the period from 2010 to 2022. Within the analytical framework of the Spatial Durbin Model, this research decomposes the baseline effect, functional transmission pathways, and cross-sectional heterogeneity of the impact of the development of small loan company (SLC) providers on urban carbon intensity. The results show that SLC expansion significantly increases local carbon emission intensity and produces spatial spillover effects across neighboring cities. Mechanism analysis indicates that SLCs increase emissions mainly by supporting the expansion of small- and micro-sized enterprises in energy-intensive manufacturing sectors, while their role in promoting green technological innovation remains limited. Further analysis shows that local government willingness to pursue green transition weakens the carbon-increasing effect of SLCs, whereas digital inclusive finance strengthens it. The effect also varies by location and regulatory environment, with stronger effects in medium-distance cities and under lower regulatory intensity. These findings reveal how grassroots inclusive financial institutions affect regional carbon outcomes and offer policy implications for aligning inclusive finance with green transition goals. This paper innovatively transcends the conventional low-carbon research paradigm focusing on macro-finance and large formal financial institutions, and instead takes SLCs, a typical micro-level inclusive finance entity, to explore their unique paths affecting regional carbon emissions, and clarifies their action boundaries from multiple dimensions including government governance and digital finance empowerment, which enriches interdisciplinary research literature integrating inclusive finance and low-carbon economy. But this study has limitations: its sample is limited to the Yangtze River Delta urban agglomeration, so the universality of the conclusion needs further verification. This research provides theoretical support and policy reference for regulating the sustainable development of the small loan industry, promoting the integration of inclusive finance and green low-carbon transformation, and advancing high-quality regional low-carbon development.