NEW YORK (Bloomberg) — Treasury Secretary Timothy Geithner urged US banks to boost lending to small businesses and consumers who still face "very challenging" credit conditions and rising unemployment.

"Banks bear some responsibility for the extent of the damage caused by the crisis," Geithner said yesterday at a small-business conference in Washington. "You carry a substantial obligation to help our communities get back on their feet."

Bank of America Corp.'s total loan originations in September fell six percent to $53.6 billon from a month earlier and Wells Fargo & Co.'s new lending dropped 14 percent to $47.4 billion, a Treasury Department report two days ago showed. The monthly surveys show lending patterns by the biggest banks receiving government funds from the $700 billion Troubled Asset Relief Programme.

As the Obama administration moves from "rescue" policies to what Geithner called the "repairing and rebuilding" phase, joblessness last month reached a 26-year high of 10.2 percent. The Treasury chief yesterday said the administration is committed to doing more to help small businesses get credit needed to "grow and hire new workers".

Goldman Sachs Group Inc. announced plans yesterday to join Warren Buffett to provide assistance to 10,000 small businesses in the US. The $500 million charitable effort aims to provide help ranging from counselling to obtaining funding. Buffett's Berkshire Hathaway Inc. is the largest shareholder in New York- based Goldman Sachs.

"Without increased access to credit for American families and small businesses, growth will be weaker, companies will defer long-term investments and we will not be able to create a recovery that is self-sustaining and led by private demand," Geithner said.

Total loan originations from the largest TARP aid recipients increased 2 percent in September from a month earlier as lending by Citigroup Inc. grew four percent to $15.3 billion and JPMorgan Chase & Co.'s rose 16 percent to $50.6 billion, the report showed.

Large businesses get 30 percent of their financing from banks, while small businesses rely on banks for 90 percent for their credit, Geithner said.

"So when banks pull back, small businesses take the hardest hit," he said.