The problem with a deflationary currency is that prices, wages and income go down over time. Someone borrowing 100 BTC today will have a hard time paying back that 100 BTC one year from now (let alone the interest) because they will be earning less than they do today.
So loans would need to be short-lived and with high scrutiny, to make sure they are payed back. I consider this a good thing, as opposed to the other extreme: give everyone a loan no matter what (the root cause of the 2008 financial crisis).
