Details matter.

You didn't identify if his reporting to others is 1099-Int? 1099-Misc? 2% of what, for what reason? Is no one sending a 1099 of some type to him?

You likely see a payment to him that is principal and interest. Somewhere there is an agreement.

Is his payment to the other people interest only, or is it part of a payout that is principal and interest? Somewhere something is documented.

Do you know what the initial numbers are for whatever was sold, and how the installment period is structured?

"Could someone point me in the right direction as to whether those payments are deductible and/or how they would be reported on the tax return?"

Business or personal return? Business or personal sale?

There are hardly any details here.