Net lending to small businesses under a flagship Bank of England scheme shrank by £435 million in the second quarter of 2014 despite efforts to focus the initiative on the sector.
The figures represented the first full quarter since the Bank's Funding for Lending (FLS) scheme was further tweaked to concentrate on small and medium enterprises (SMEs) that are seen as key to sustaining the recovery.
They were an improvement on the first quarter, when SME lending by banks and building societies participating in FLS fell by £719 million.
But the British Chambers of Commerce called the update disappointing for businesses while one analyst said savers were also being punished as the availability of cheap finance under the scheme means lenders have less need to raise cash rates to attract deposits.
The total drawn down by lenders under FLS reached £45.8 billion, including £3.2 billion in the second quarter.
For the latest period, all business lending by banks and building societies using FLS fell £3.9 billion - compared to a £2.7 billion fall in the first quarter - with the bulk of this coming from lending to large corporations, down £3.5 billion.
The best growth in net lending to small businesses came from Lloyds Banking Group - 25%-owned by the taxpayer - which saw an increase of £384 million.
But its total business lending fell by £2.1 billion, which the bank said was due to less borrowing from larger companies and a run-off of non-core parts of its business.
Royal Bank of Scotland, which is 80%-owned by the state, saw net lending to small businesses fall by £360 million and an overall drop of £1.5 billion.
John Longworth, director general of the British Chambers of Commerce, said: "Although the decline in lending to SMEs was less than in the previous quarter, Funding for Lending continues to disappoint.
"Despite the welcome re-focus towards SME lending, the real test for the scheme has always been whether it is able to get credit flowing to young and fast-growing businesses.
"Unfortunately, many of these firms remain frozen out when it comes to accessing the finance they need to fulfil their potential."
Laith Khalaf, senior analyst at stockbroker Hargreaves Lansdown, said: "The jury is still out on the Funding for Lending scheme and today's figures don't increase the chances of a positive verdict.
"The Bank of England will maintain that the scheme will take some time to have full effect, and we don't know what business lending would be shrinking by if the scheme were not in place.
"Lending demand may also be part of the problem. Perhaps so, but meantime savers are bearing the brunt of the pain in their deposit accounts and cash ISAs."
The Funding for Lending scheme was launched in 2012 , giving banks and building societies access to cheap finance in return for lending to households and businesses, and was later revamped with a skew towards small firms.
Changes announced by Bank of England governor Mark Carney last November, which fully came into place from the end of January, meant the scheme would no longer apply to household loans, amid fears of an overheating housing market.
They also meant reduced fees for access to funds drawn down related to SME loans.
The Bank says bank funding costs have fallen significantly since the launch of FLS, resulting in an improvement in corporate credit conditions.
It said separate figures showed total net lending to non-financial businesses, including by lenders not involved in FLS, rose in the second quarter.