New lending to small and medium-sized enterprises stood at €2.1bn in the year to June, according to the Central Bank, €200m higher than in the twelve months to December 2013.

The agricultural industry was the biggest beneficiary of this increase, with whole and retail businesses also gaining as a result.

Despite the rise in new lending, the Central Bank’s SME Market Report shows that outstanding credit to the sector continues to decline – down to €22.6bn in the year to June compared to €24.6bn in the year to December.

The report also shows an improvement in credit approvals amongst SMEs, with rejection rates down to 14%, compared to 19% six months previously.

However the level of demand for lending was also lower – particularly in the area of loan and overdraft restructures or renewals.

Working capital makes up the majority of applications, though it had a lower share in the most recent report, with borrowings for growth and expansion increasing.

The Central Bank data also looked at default rates in the period, with the percentage largely holding steady on previous reports.

The default stood at more than a quarter of loans but represented more than 41% of the loan balance, with the construction, hotel and restaurant businesses contributing most to that figure.