The complaints procedure was launched on 1 April in response to concerns that the main high street banks - HSBC, Barclays, RBS, Lloyds and Santander - were unfairly dismissing business loan applications, despite having agreed to set aside a £190bn pool for business lending under the project Merlin agreement.

Each bank has its own appeals process; however, it is incumbent on each bank, whenever it declines a formal request for lending from an SME, to inform the applicant of the appeals process. It is then up to the applicant to generate an appeal.

Cable appeared to lay the blame for the scheme's poor initial uptake at the banks' door. "One of the things that concerns me is that we now have a good system in place, which the banks have co-operated with, but not many companies are actually using the appeals process," he said. "It's possible they don't know about it."

According to Russel Griggs, the former chairman of the CBI's small business council who heads up the independent review team that monitors the appeals process, of the limited number of appeals filed thus far, only a minority have led to the reversal of a lending decision.

News of the poor take-up of the appeals process follows a recent government survey that found a dramatic rise in the number of small businesses being rejected for finance by their banks.

According to the survey of 4,500 firms, which is carried out every three years, 51% had difficulty accessing the required finance, while more than a third were turned down altogether.

Common reasons for the rejected applications were lack of security, sector risk being too great, and the existing credit climate. Worryingly, 24% of failed applicants said they had not been given a reason, which supports ongoing concerns over the need for banks to improve customer communication.