Lending to Small and Medium-sized enterprises (SMEs) is on the rise, according to new figures from the Central Bank.

The SME Market Report also shows that annualised gross new lending to SMEs has been increasing steadily since early 2014 and is currently €2.6 billion, the highest value since 2011.

New lending, having been close to €2.5 billion before 2012, reduced to approximately €2 billion in 2012 and 2013. It is now at €2.6 billion.

Almost half (48 per cent) of SME loan applications in the first quarter of 2015 were for working capital purposes, according the report. Property-related loan applications are cited by 11 per cent.

The Central Bank report said interest rates on Irish SME loans are high relative to other euro area member states. It also noted loan applications and borrowing for investment purposes are low in Ireland, while borrowing for working capital is high.

Outstanding credit to the non-financial, non real-estate SME sector was down 10.6 per cent to €21.4 billion between the last quarter of 2014 and the first quarter of 2015. Overall, outstanding credit to the SME credit has fallen 41 per cent from €36.6 billion in the first quarter of 2010 to €21.4 billion in the first quarter of this year.

Default rates show an improvement over previous reports, and currently stand at 22.7 per cent by count and 36.9 per cent by balance.

According to the study, agriculture received the largest share of new lending in each quarter from 2-2010 to 2015, followed by the wholesale/retail and business and administrative services sectors.

In the first quarter of 2014, all sectors except manufacturing showed an increase in annualised new lending. The hotel/restaurant sectors showed the biggest increase in lending (rising 69 per cent) during the first quarter, followed by the wholesale/retail sector at 59 per cent, and the construction sector at 40 per cent.