London, Nov 16 (Reuters) - Ninety percent of the world's self employed poor - more than a billion people - lack access to basic financial services they need to improve their lot, a United Nations agency said in a report on Tuesday.

The UN International Fund for Agricultural Development (IFAD), said in a statement access to services, like credit, savings, insurance and money transfers, can lift millions across the world out of grinding poverty, Gary Howe, IFAD's chief development strategist, told Reuters in London that some Asian countries such as India, China, Vietnam and Indonesia, were making strides in solving the problem.

However a slow rate of economic expansion and inability to move to commercially independent financial entities from government-led management were proving to be major roadblocks in most parts of Africa.

''The area where we are not seeing much progress is Africa,'' Howe said.

Howe said rapid economic expansion in Asia had thrown up new income opportunities for the poor and paved the way for growth of microfinance.

''There are not very strong linkages in Africa as the economy is not providing that opportunity for expansion and also partly because of the traditional position of commercial banking in Africa, apart from South Africa,'' he said.

''I do think we have to focus a lot on Africa in the coming years. We are becoming increasingly aware of the political implications of non-development in certain parts of the world,'' Howe added.

Rome-based IFAD said providing poor people with basic financial services could help meet the globally-agreed Millenium Development Goal of halving by 2015 the proportion of people living on less that $1 a day.

IFAD said over the past five years the microfinance sector grew at an average of 25 to 30 percent and global banks like Citibank and Deutsche Bank were moving into microfinance attracted by lucrative returns and reducing poverty.

India's ICICI Bank, the country's second largest commercial bank, was working with self-help groups to aid 2.5 million poor families to gain acccess to credit and other financial services.
The agency said even global capital funds have begun to take an interest in the market for microfinance.

In July, the first microfinance bond, worth about $40 million, was issued from U.S. capital markets to support development of microfinance in nine developing nations.

Howe said the ''wave of tomorrow'' was moving towards providing the poor access to commercially viable financial services, away from government directed lines of credit or international transfers.

''But microfinance is not a panacea. If you have no market penetration and underlying profitability, microfinance is not going to solve the problem,'' he added.

On November 18, the UN-designated International Year of Microcredit 2005 will launched from stock exchanges in several cities, including New York and Milan.