The DRM is part of the lending: it gives you the right to read the book for a limited period on compatible systems.
In the UK and many other places, libraries use Overdrive which uses the Adobe ADEPT DRM infrastructure.
This is supported by a majority of eReader devices, and there are apps for its use on most tablets and phones.
ADEPT is as close as anything to being the 'open' DRM standard for eBooks.
Amazon the publisher and producer of Kindles has sadly chosen not to support the ADEPT standard on Kindles,
and Kindles are therefore not compatible systems.
I understand that many libraries in the US have also arranged for lending of books in MOBI format.