Credit unions offer a way of saving and borrowing

The assurance has been given by a director of Ruabon, Cefn and District Credit Union, which is being wound up more than a year after it stopped trading.

Sharon Angus-Crawshaw said it was hoped all members who had invested would get their cash back before Christmas.

It is hoped that a new credit union for the whole of the borough of Wrexham will be opened next year, which will allow members of this defunct scheme to join.

We reached the stage where we were going nowhere Sharon Angus-Crawshaw

Credit unions are owned and controlled by their members, who save into a common fund, which pays interest and can offer low interest loans to other credit union members.

The Ruabon union, which had been running for about 10 years, has been declared "in default" by the Financial Services Compensation Scheme (FSCS).

This means that the FSCS can now give compensation to any of its members - numbering between 120-150 - who lose money as a result.

This would be 100% of the first �2,000, and 90% of the rest, up to a maximum of �31,700.

'Great shame'

But Mrs Angus-Crawshaw says her own investment of around �2,000 was the biggest sum, and others were considerably smaller.

The union's collapse was blamed by Mrs Angus-Crawshaw on the difficulties of getting enough volunteers and a failure to secure funding for a paid worker.

"We were heavily reliant on volunteer help and support and over the years the volunteer base dwindled, but we didn't have the capacity to go out and seek new volunteer members," she said.

"We reached the stage where we were going nowhere. This really was the best course of action.

"It's a great shame to do that to our existing members, but we had given them due warning and wrote to them two years ago."

Mrs Angus-Crawshaw also works for the credit union at Caia Park in Wrexham, and she hoped the new county-wide credit union would be in operation by the end of next year.

Abby Shelton, of the Association of British Credit Unions, said about half a dozen credit unions had gone under since they came under regulation by the Financial Services Authority last year.

She said it was becoming more common for credit unions to merge into bigger organisations. In Wales that has happened already in Cardiff, Rhondda Cynon Taf and Swansea.