WASHINGTON (Reuters) - The World Bank and British bank Standard Chartered Plc said on Thursday they hope to expand funding for microfinance lending in Africa and Asia in a deal that issues credit-linked notes backed by loans.

The International Finance Corp, the World Bank's private-sector lender, said it will invest $45 million in credit-linked notes issued by Microfinance Institutional Loans for Asia and Africa (MILAA) established by Standard Chartered to expand its lending to the microfinance sector.

The proceeds from the notes will be used as credit protection, through a credit default swap against the default of a portfolio of loans to microfinance institutions held by Standard Chartered and its subsidiaries.

The transaction will enable Standard Chartered to issue additional credit to microfinance institutions that deliver loans to small companies or to the poor who do not have access to mainstream banking in developing countries.

"This transaction will unlock more funding for microfinance," said Peter Sands, Standard Chartered Group's chief executive, in a joint statement with the IFC.

"We believe improving access to finance is a key lever in reducing poverty and catalysing broader social and economic development," Sands added.

Lars Thunell, IFC executive vice president and chief executive, added, "We are building an asset class for investors who are looking for more microfinance opportunities in emerging markets."

A World Bank report last year found that less than half of adults in some of the world's poorest countries have bank accounts, and in most of Africa, only one in five people have access to financial services.

The report also found that in many of these countries small and medium-sized companies were constrained by poor access to financial services.