Net lending by banks and building societies using the Funding for Lending Scheme contracted by £2.7bn in the first quarter of the year, figures from the Bank of England have revealed.
In November Mark Carney attempted to encourage lending to SMEs by putting a stop to using new funds for household lending but his efforts failed as net lending fell by £0.7bn.
Lloyds Banking Group (LBG) net lending to SMEs for the first three months of the year totalled £536m followed by Santander and Aldermore with £179m and £88m respectively.
The Bank tried to stimulate lending to smaller businesses by allowing participants in the scheme to draw £5 from the pot for every £1 of net lending to SMEs.
But in Q1 only four participants withdrew money from the FLS; LBG, Bath Building Society, Monmouthshire Building Society and Teachers Building Society totalling just over £2bn.
The extension to the scheme is set to last until 31 December 2014.
