1.1 to 1.5 percent per month is quite attractive.
However that still quite a risk to take to trust anyone with your btc
A steady 1% every month? Sounds a little like Madoff... As good as that sounds, I'd rather not do something like that.
This "interest" is paid by actual borrowers for the privilege of using your money for leverage. The interest rate is also market driven and not paid for directly by the exchange. The exchange also has risk controls in place to prevent potential losses to lenders