Banks drew down £4.4bn from the Bank of England's Funding for Lending scheme in its first two months.
Data released by the Bank today shows the first set of results from the scheme to the quarter ending on 30 September.
There are currently 35 banks and building societies participating in the scheme and total net lending has risen by £496m.
The scheme was set up on 30 June 2012 and works by reducing funding costs for banks which allows them to reduce the price of new loans and increase their net lending.
The Bank said it would take a while for reduced funding costs to filter through to lending volumes due to lags involving loan applications, approvals and drawdown processes.
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Paul Fisher, executive director for markets at the Bank of England, said: "I am confident that the FLS will help the supply of credit. The incentives in the scheme are for banks and building societies to cut lending rates and hence lend more to get the cheapest funding.
"Since the scheme was announced we have seen widespread falls in funding costs across different sourced and an equally wide variety of lending rate reductions. But it is too early to use these data as a reliable indication of the impact of the FLS on lending volumes."
Matthew Fell, director for competitive markets at the Confederation of British Industry, said: "It's still early days for the Funding for Lending scheme but it looks like it has started to make a positive difference to both the cost and availability of finance. The sense on the ground is that the scheme has made more inroads in the housing market so now we need to see a big push so that it makes a difference in the business lending market.
"Raising awareness of Funding for Lending to give firms confidence to approach their banks will be critical to its success. We urge the Government to push ahead with its plans for a business bank, including an advice centre so that SMEs can learn about finance schemes and get the help they need to grow."

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