He is from former Yugoslavia. His mothers name Milica is usual Serbian female name. The language spoken in game is Serbian, Bosnian, Croatian - they are all the same languages, just with different dialect (etc. English - UK and Australian english).
In Bosnia, there are about 45% of bosniaks (muslims), 35% of serbs(orthodox) and 20% croatians (catholics), so it could be very likely that Niko is Bosnian Serb.
It's known that he was in war which gets him Bosnian Serb even more likely. Voice acting of serbian (or bosnian, croatian) is terrible. I know this, because I'm from Bosnia. You can barely understand what's he saying, I heard him saying something like "You are a shithead" - "Ti si seronja" and guess what, it was terrible.
So Niko is definitely a Serb. 60 % that he's bosnian Serb, 30% that he is regular Serb (from Serbia, ofcourse) and 10% he's croatian Serb (Sava river region).