Coming late to this but I basically see this type of lending being relevant to the less well off and those who dont have good credit. I see it a bit like microfinancing in the developing world in that respect where access to borrowing can change lives. The same can be said in the western context: if your boiler or car suddenly breaks and you cant get credit anywhere else a product like this could be a life saver. The APR looks a bit high but if the alternatives are likely to be Wonga or loan sharks then it is a great option for Monzo to develop and quite competitive.
On the other hand, if it’s designed to be a main stream product to compete with credit cards I cant see it taking off without an initial 0% period or a much lower rate.