Saudi Arabia has drawn substantial demand for its first foreign borrowing in more than a decade, and looks likely to increase the size of the loan, banking sources aware of the matter said on Sunday.

The world's top crude oil exporter asked banks for a loan worth between $6 billion and $8 billion that would run for five years, sources told Reuters last month, as the kingdom seeks to plug a record budget deficit caused by low oil prices.

The response from lenders has been significant, according to the banking sources, with one noting that the Ministry of Finance was now in the process of analysing the submissions from banks before finalising the loan specifics.

A spokesman for the ministry did not respond to a request for comment. The sources spoke on condition of anonymity as the information was not public.

Among the tasks for the ministry would be to decide how much to borrow from each of the banks that have submitted orders, as well as the final size of the loan.

The original request to banks had an option to increase the size of the deal beyond the $6-8 billion target, and bankers now expect that this will be activated.

The loan issue reflects the effect of the oil slump on the finances of the world's biggest oil exporter, which ran a record budget deficit of nearly $100 billion last year.

With domestic borrowing starting to strain liquidity in the local banking system, and reserves declining, the government is being forced to turn to overseas capital markets to finance part of the deficit.

Participating in the loan is seen as a way for banks to position themselves favourably to be asked to help arrange an international bond that Saudi Arabia is expected to issue sometime this year, one of the most highly-anticipated sovereign bond sales in emerging markets.