The traders pay interest on the loans out of their exchange wallet. It is a way to leverage your balance to get a larger return. Any borrowing in any currency requires repayment of a certain percentage over what you borrowed. Have you ever bought a home? A car? Same thing.
I'm well aware of how trading accounts work, and loans in general. Thats why i find i it odd anyone thinks this is a killer app for Bitcoin.
I think they are referring to the ability to stockpile coins and have them actually grow the way fiat used to before the monetary system was destroyed. It creates more demand because holding them is even more profitable.