The overall volume of credit extended to SMEs continued to contract last year despite the pick-up in the economy.

Figures from the Central Bank show the outstanding amount of credit advanced to Irish SMEs was €56.9 billion at the end of 2014, which represented a 4 per cent decline on the previous quarter. In annual terms, outstanding loans fell by 8.5 per cent.

However, the figures also indicate gross new lending to non-property or finance-linked SMEs grew by 25 per cent to €2.4 billion last year.

The reason why credit is shrinking as new lending is increasing is because repayments are continuing to outpace new lending.

The new State-backed Strategic Banking Corporation of Ireland (SBCI), which has been set up to offer loans to companies at cheaper rates, is expected to encourage banks to increase their lending patterns further.

Property-related lending to SMEs, which includes the construction and real estate activities sectors, constitutes the largest share of outstanding loans to non-financial SMEs, at 54 per cent or €25.1 billion.

Lending to SMEs in these sectors fell by a combined 10.5 per cent in 2014, a net flow of minus €3.1 billion, where repayments exceeded drawdowns.

The figures also show deposits from deposits from non-financial Irish resident private-sector business, essentially savings, grew by 13.2 per cent last year to €45.1 billion.

The total amount of credit outstanding to Irish private-sector enterprises on the balance sheet of credit entities here was €135.3 billion at the end of last year.

About 51 per cent of this was related to the financial intermediation sector, which would include holdings of debt securities issued by the Nama and other financial vehicle corporations.

Excluding financial intermediation, the total amount of private-sector enterprise credit outstanding was €66 billion.