Small and medium sized enterprises (SMEs) drew down €172 million in lower cost funding from the State-backed Strategic Banking Corporation of Ireland (SBCI) last year.

The SBCI was established to provide at least €800 million in low-cost financing to SMEs from funds sourced by the European Investment Bank, German bank KfW and the Ireland Strategic Investment Fund (ISIF).

In a statement, it said 4,619 loans were drawn down by Irish businesses since it began lending in March 2015, and that loan uptake on a quarterly basis “has been gathering momentum” since then.

The last quarter of 2015 saw €71.5 million in loans drawn down, which was a rise of 28 per cent on the previous quarter.

Of the €172 million funding drawn, €144.5 million was for investment purposes, €15.6 million for working capital, and €11.9 million for the refinancing of existing bank loans.

The agricultural sector accounted for more than a quarter of loans, with Wholesale and Retail Trade at 16 per cent.

The average loan size has also increased 19 per cent to €37,000 on the previous quarter with the “vast majority” of businesses borrowing for investment purposes. Loan sizes varied from €1,200 to €4 million.

SBCI chief executive Nick Ashmore said the figures suggest SMEs are "seeing the value of choosing a lower cost option".

“We are pleased to be able to report these figures today showing the traction SBCI loans are now gaining in the marketplace with take-up across a wide sectoral spread of businesses improving each quarter,” he said.

“It suggests that SMEs are seeing the value of choosing a lower cost option to fund investment in their businesses and our lending partners are facilitating the efficient distribution of this funding.

“SMEs are certainly indicating that 2016 will be a year of growth and expansion and the SBCI is primed to focus on supporting this growth with further funding and a more diverse range of SBCI lenders and products.”