I wonder if the shoes have been adjusted at the wheels without having first set the adjustment latch at the handle end resulting in the cables being overtightened. Slacken off both adjusters at the whhel end so the shoes are backed off then go and latch the adjuster at the handle end so tension on the cables is taken off. With the handle in the off position go to the wheels and adjust the shoes up till the wheel cannot be spun, meaning the brake is applied. BMW Technical Info says back the adjuster off 7 clicks. Do this on both wheels then go and unlatch the handle end adjuster, once released the spring will re-tension the cables. Apply the handbrake and go and check both wheels are being held fast by the handbrake shoes. If you have too many clicks when applying the handbrake, re-engage the adjuster at the handle end and readjust each wheel adjuster to bring the shoes closer to the drum inside, De-latch the handle adjuster again and test the handbrake lever and check each wheel is having the brake applied enough to hold the car.
All of this assumes that your ratchet teeth on the handbrake lever are intact and working ok when the handle is pulled up, always press the release button when pulling the handle up, avoid letting the ratchet ride over the teeth as this will wear the teeth down over time. Release the button when you have raised the handle enough to hold the car, its ok to let it click over the last couple of clicks to its final setting position.
If your ratchet teeth are so worn its going to need the handle removing from the car and a replacement fitted, you might get away with filing the teeth back into shape so the ratchet pawl engages with the teeth better but either way its a job that requires the unit removed from the car from underneath by dropping the prop shaft and exhaust. It can be got out from above but entails some metal bodywork bending to get it out then re-bending it back when its replaced.