Donbac, the Doncaster-based enterprise agency and finance provider, is celebrating making more loans than ever before.
The organisation provided loans totalling more than £1.5 million during 2012.
Angela Allison, executive director of Donbac, which is classed as a Community Development Finance Institution, said: “In this region, Donbac has continued to serve a growing demand from small businesses.
“While it would be excellent in future for the government to include Community Development Finance Institutions in more capital raising initiatives like the Funding for Lending Scheme, this takes time and businesses need the loans now.
“At Donbac we have already taken opportunity to grow our capital base to meet demand, securing an additional £1.5 million to lend in South Yorkshire.”
The Government introduced the Funding for Lending Scheme in August last year to encourage banks to boost the economy by lending more money to individuals and businesses.
Despite that, the Bank of England says net lending by banks fell by £2.4 billion in the final quarter of 2012 compared with the previous quarter.
Recent research by the Community Development Finance Association revealed that there is a £6 billion gap in the financial system between demand for credit and finance from the mainstream funders.
“Community Development Finance Institutions like Donbac are servicing the gap in the market and providing access to finance for SMEs at a time when the banks appear to be cautious about lending, despite the government making cheap money available to them,” added Angela Allison.
“This suggests the banks are not relaxing their credit assessments.”