Preheat fan oven to 180 degrees C/ 350 degrees F. Prepare two baking trays/cookie sheets with baking paper or parchment paper.
Add softened butter and granulated sweetener to a bowl and beat until pale and creamy (using electric beaters is best).
Add in egg and vanilla to bowl and beat in using electric beaters.
Use a spatula to scrape down sides of the bowl, then add in flour, baking powder, salt and half of the coconut. Stir through with spatula until combined and mixture resembles a dough.
To make the jam drops, roll the dough into one large ball. Break in half, then in half again so there are 4 pieces. Make 5 balls out of each of the four pieces of dough so you have 20 balls.
Roll each ball in the remaining coconut. Place balls 2 cm/1 inch apart on baking sheet.
Use thumb to make a dent in the centre of each one (about half way, not all the way through). Add ½ teaspoon of jam into the indentation of each jam drop. (see note 4)
Bake for 15 minutes in fan oven at 180 degrees C/ 350 degrees F. Remove and let cool on tray for 5 minutes, then transfer jam drops to a wire rack to cool to room temperature (make sure to keep them covered with a towel whilst cooling)
Once cooled to room temperature, store in an air tight container for up to 5 days.