Berehaven Credit Union in Castletownbere has 3,500 members and a shortfall in its capital requirements of €1.3mn.

Customers of the collapsed Berehaven Credit Union in Cork have begun to receive compensation payments.

The Central Bank says payments totalling €10mn have been sent to more than 3,100 members of the credit union. The bank says 85% of savers have now been compensated.

The credit union was placed into liquidation last week after it got into financial difficulty.

The Bank says Berehaven savers will automatically receive their savings back from the government deposit guarantee scheme.

The Central Bank said it took this action as it was no longer viable as a stand-alone credit union.

"Berehaven Credit Union had serious financial difficulties due to poor governance, lending practices and a lack of internal controls, which the Central Bank has engaged with the credit union on in recent years in an attempt to find a resolution" it said.

The Bank said it examined "all available options, including a directed transfer to another credit union", but that the financial support required was significantly greater than the estimated cost of liquidation.

"Alternative options to resolve the serious financial difficulties at the credit union were examined but were found not to be feasible" it added.