When Monzo offer you an overdraft they take a risk (& lose some of that money, due to bad debts), while providing you with a valuable service. So you are paying to cover the losses & use the service - but if you don’t want an overdraft, you don’t have to take one.
They’re not earning significant amounts of money in other ways - medium / high return investment, mortgages, business loans etc. which the other banks do.
Since the overdrafts, which are their only significant revenue stream, will only cover their costs, it would be risky / foolish to use them to fund interest payments on deposits.
But users who want to earn interest on their in credit balance will be able to transfer & manage it via Monzo’s API & marketplace. So they’ll have easy access to a Moneybox ISA or P2P lending service provider.