As part of the "clandestine dispensation," the terror group is offering loans to young entrepreneurs in the country's troubled northeast as part of recruitment, the military said in a statement Wednesday.
Butchers, traders, tailors, beauticians and other vocational entrepreneurs are major targets of the "unholy business engagement," it said.
"After such loans, the beneficiaries are given the option of either joining the group or risk being killed if they fail to pay the loan as at when due," the military said. "The payment has been surreptitiously programmed to fail by the benefactor, the Boko Haram."
Authorities urged residents to avoid loans or financial assistance from nonconventional sources.
Boko Haram's desperation to recruit members shows the sustained offensive by government forces is working, the military said.
But critics say the government has not been as effective in fighting the terror group. Last week marked the two-year anniversary of Boko Haram's abduction of nearly 300 schoolgirls from the town of Chibok.
Most of the girls are still held captive, forcefully married to Boko Haram fighters, and in some cases used as suicide bombers. CNN obtained exclusive footage last week that shows some of the girls are alive. While the video was sent to negotiators by their captors as a "proof of life," the government did not act on it at the time.
Boko Haram, which means western education is a sin in the local Hausa language, has become the deadliest terror group for its attacks in Nigeria, Chad and Cameroon. It has killed more people than ISIS, which it reportedly pledged allegiance to, according to the Global Terrorism Index.
The group is blamed for attacks on government targets as well as schools, mosques and churches.
It aims to impose a stricter enforcement of Sharia law across Nigeria.