The Chief of Defence Forces of the Kenya Defence Forces (KDF), General Charles Kahariri, has warned soldiers against shylocking and financial indiscipline, cautioning that exploitative lending practices could undermine their welfare and military discipline.
Kahariri issued the warning during his KDF Day commemorative tour, where he visited troops deployed under Operation Maliza Uhalifu in Doldol and personnel at the School of Military Engineering in Archers Post, Isiolo on October 17.
The CDF cautioned soldiers against engaging in exploitative lending arrangements, urging them to exercise financial responsibility and avoid practices that could compromise their professionalism, personal stability and ability to perform their duties.
Shylocking involves informal lending outside regulated financial systems, with borrowers often facing steep interest rates and aggressive debt recovery tactics that can leave them struggling to repay loans.
Chief of Defense Force General Charles Kahariri
Kenya Defence Forces (KDF
In Kenya, some informal lenders reportedly charge monthly interest rates of between 20 and 30 per cent, with rates sometimes reaching 40 per cent on short-term loans, increasing the risk of mounting debts.
Cases involving KDF personnel have exposed alleged financial scams, including the ‘pata potea’ scheme, in which servicemen reportedly borrow millions from civilian lenders for business projects and then default.
Other schemes involve soldiers allegedly soliciting money from civilians in exchange for promised KDF recruitment slots, with informal loans sometimes linked to bribery and favors according to KDF reports.
Instances of these activities within the KDF ranks include a Nairobi-based KDF serviceman who allegedly borrowed over Ksh3 million from a civilian lender, then blocked her number and defaulted on the pata potea scheme.
Another incident is that Former Sergeant Andrew Muoki Mutua was sentenced to 42 months in prison after a court-martial found him guilty of soliciting money under false pretenses, including Ksh300,000 and Ksh450,000.
Consequences of Illegal Financial Activities to KDF Soldiers
KDF personnel involved in unauthorized lending schemes risk disciplinary action under the Kenya Defence Forces Act, 2012, particularly where their conduct undermines military discipline or involves alleged fraud.
Serious cases may lead to court-martial proceedings under Section 121, which addresses conduct prejudicial to good order and discipline, or under Section 133, which covers civil offenses.
Under Section 180, court-martial sentences can include imprisonment, dismissal from the Defence Forces, reduction in rank, fines or reprimands, depending on the offence and circumstances.
A military parade during the Recruits' Passing Out Parade in Eldoret, Uasin Gishu County, on August 13, 2026.
PCS