Charity specialist bank Triodos saw its balance sheet grow by 12 per cent to more than £750m in the first six months of 2005, according to latest figures.
The bank's deposits have surged to £215m - an increase of £17m - from more than 20,000 customers.
About 600 charities and social businesses now bor-row from it in the UK, and 3,300 across Europe. The bank also has offices in the Netherlands, Belgium and Spain. Lending in the UK totalled £19.4m in the first six months of the year.
"Ethical finance is flourishing," said Charles Middleton, UK managing director of Triodos.
Triodos' growth rates confirm a burgeoning interest in ethical banking and loan finance. Two weeks ago, Charity Bank announced that it had doubled its balance sheet in eight months and had £25m available for new loans. Each month, loan proposals worth £1m are being put before the bank's credit committee.
Middleton said that Triodos's success was "not a short-lived fad. We have had sustained growth throughout the past decade."
The bank's profits are rising significantly as well, up by 16 per cent on the first six months of 2004.
Claire Glossop, head of sustainable funding at the NCVO, said the organisation was encouraged by the range of loan finance available to the voluntary sector.
She added: "Our research shows that many organisations are still not aware of the opportunities loan finance can provide and what it would mean for them."