Lending figures have shown that UK banks are falling behind on their lending to smaller firms, sparking anger from business groups. The Business Secretary, Vince Cable, has warned that he wants a "significant improvement" in lending.

Under the Project Merlin agreement between the banks and the government, Barclays, Royal Bank of Scotland, Lloyds, HSBC and Santander pledged to loan £76bn in 2011, which, if distributed evenly, would equal £19bn per quarter.

With the project more than three months under way, the banks' figures have only reached £16.8bn, leaving them £2.2bn behind already.

Lending to enterprises of all sizes should reach an annual total of £190bn. The first quarter figure was £47.3bn, only slightly less than the £47.5bn quarter average.

A Merlin banks spokesman said: "These numbers demonstrate the determination of the Merlin banks to lend to viable businesses - it has been a solid start to the year."

Merlin banks claim that these figures are encouraging and display the banks' resolve to reach target numbers, but many small firms feel they are not receiving what they were promised.

The British Bankers' Association insists the banks are using every resources to carry out their obligation as part of the project, but they do acknowledge that some small businesses might still be struggling to obtain their share of the funding.

"So whilst these numbers are encouraging, it is too early to draw conclusions as to the year-end outcome," the BBA said.

In addition to the lending requirements of Project Merlin, the five banks involved must pay less in bonuses than the previous year and provide transparency in payment of their top executives.

Cable has made banks aware that they will be subject to higher taxes if their lending doesn't increase. In addition to tax levies, the bonuses of bank chief executives will be determined, in part, by the fulfilment of their lending promises.