A report has called for a reassessment of the banks' lending policies.
The Credit Review Office's review said banks need to show more evidence of ''enterprise risk-taking'' in order to support economic recovery.
The Credit Review Office provides an independent view on the refusal of credit to small and medium sized businesses and farms.
Credit Reviewer John Trethowan said the two pillar banks are being supportive of medium and low risk new lending proposals from well established SMEs and farms which already bank with them.
But he added that he is disappointed that there is not more evidence of support for what he termed 'enterprise risk taking' in current lending policies by AIB and Bank of Ireland.
Mr Trethowan says the current risk appetite by banks needs to be reassessed, in order to support economic and employment recovery.
He said that over the past three months, the Credit Review Office has received 44 applications from SMEs who have been refused credit by AIB and Bank of Ireland - the two pillar banks.
''Whilst I acknowledge that this is a difficult lending environment for lenders, my views are influenced by where we are in the economic cycle, where both trade levels and commercial property values may have now stabilised around their current levels,'' Mr Trethowan said.
''If this is the case, it should make appraisal of future prospects much easier for lenders to assess risk than anytime since 2008,'' he added.
He also pointed out that the bank solvency crisis was mainly caused by commercial and residential property lending and only to a less degree in lending to SMEs.
The Credit Review Officer said that work is ongoing on 31 cases. Of the cases completed in the last quarter, 17 banks refusals were overturned. This resulted in the two banks supplying €2m of credit, which the Credit Review Officer said supported a further 140 jobs in the SME sector.
Mr Trethowan said that since the setting of the office in 2010, 197 appeals have been received. Of the cases completed, 69 of the refusals were overturned. This resulted in banks supplying €6.9m of credit and supporting 683 jobs in the SME sector. 48 of the cases were upheld in the banks' favour.
Businesses assisted in the last quarter included the expansion of Matt the Threshers restaurant and pub into Dublin, the Organic Supermarket in Blackrock, Co Dublin, the Fun Galaxy Learning and Activity business in Co Dublin and the Animal's Choice business in Co Limerick. Accountant Paul Russell of Ardagh Consultants in Co Louth also used the Credit Review Office to appeal a bank decision on behalf of one of his clients.
The Credit Review Officer said that while he is clear his office is not to be viewed as a permanent fixture, he believes that the level of peak demand for the service has not yet arrived. He said that as the domestic economy recovers and SMEs seek to increase working capital, the demand for credit will increase.
Two factors underline the need for Credit Review Office assistance, Mr Trethowan said. This is where SMEs have relatively poor capital and liquidity after three years of the domestic economy flat-lining and the need to rebank some SMEs currently banked with IBRC (Anglo Irish Bank) and Certus (Bank of Scotland Ireland) which will be looking for new and increased credit that these banks will be unable or willing to provide.
