The borrower won't have 21.21 coins, no matter what he does -- only 21 coins exist.  This problem is trivial in fiat -- print moar!

Put simply, Moneylenders do not just hoard all the money that they get back. Yes, it's entirely possible for someone to borrow BTC20MM and end up owing BTC36MM. This does not mean that they will be unable to pay it, necessarily, just that there will have to be at least BTC15MM that goes through his hands (and back to the moneylender) twice. While he's paying his tremendous debt, the economy is chugging right along, and he's providing value to that economy in order to get the BTC that he owes.