Sentence Correction

The United Nations passed a resolution that would encourage banks to make micro-loans to citizens in developing countries and if borrowers failed to repay the loans they would be compensated.

a) if borrowers failed to repay the loans they would be compensated

b) failing to repay the loans would result in compensation for the banks

c) compensate banks for loans that borrowers failed to repay

d) compensating banks for borrowers failing to repay loans

e) banks to be compensated for loans that borrowers failed to repay

IMO C...its parallel

IMO C

The United Nations passed...that would ENCOURAGE....and (need a 2nd present-tense verb).

What else would this resolution do? The answer is C.

Look out for the word "and" -- it usually indicates we need two parallel phrases.