20% pm isn't frightening when compared to Wonga's 2.5k% APR, but the details are in the fine print.
I don't think the local bankers know what a court is, or that they would bother with any legal small claims procedure. The ones I know in Pattaya almost always get paid, and on time. Almost, sound risky, huh?
On the contrary while they prefer everyone to pay on time, since this makes for an uncomplicated life, they don't mind late payers at all. These usually generate not just a hefty penalty that's being compounded at a higher rate, which the delinquent borrower by implication cannot cope with, but also collateral in the form of a bike or car or property that's worth more than the outstanding. And once in their possession these assets rarely end up redeemed, which means a greater ROI.
As for police getting involved when a client is in over his head, most banker ops are co-opted by at least a mid-rank brown or other uniform.