The SME lending market has become more concentrated due to the exit of foreign banks, according to Credit Reviewer John Trethowan.
Remaining banks have engaged in lower-risk lending as a result, he says, which may not meet the needs of the real economy.
The Credit Review Office has published its 13th review of SME and Farm lending appeals, with Mr Trethowan identifying three trends in the sector.
In addition to the concentration in the market, he says appeal requests for credit are now more about working capital increases and business investment, reflecting a recovering economy.
The Credit Review Office is also seeing demand for refinancing debts held by foreign banks which are exiting the Irish SME lending market.